All Forum Posts by: Ryan Wamsat

@Nathan Killebrew  I've had this one on my whiteboard for many years:  "The best time to plant a tree was 20 years ago.  The second best time is now."  I don't know whom to attribute it to, and I think it's an old Chinese proverb.

After the quote I put "Retirement Planning".  This has been a conversation starter for many of my employees, many of whom were recent college grads.  And, I'm extremely proud to say that there is a good chance that I have played a small part in their future success leading to retirement.  At least, I hope that I have.

@Rojo Lewis  My girlfriend wasn't interested in real estate.  She wasn't opposed to it, but she wasn't interested in it very much either.  I kept right on pursuing it, learning about various things and plotting how I'm going to take advantage of real estate for our long-term financial success.  At every opportune moment, I would talk to her about it.  Especially when she asked me what I was thinking (which was generally work, real estate, or what we're doing this weekend).  The more I spoke to her about it, the more she opened up to the idea and saw how it could be advantageous to our future.  

Now, I'm a buy-n-hold guy.  I always have been.  I like the long/slow road, and I'm not a "handyman".  As she became more interested in RE, she started asking me how to evaluate deals... After that, the flood gates opened!!!  She is now better at analyzing deals than I ever was.  And, she is considering doing fix/flips on her own.

Talk to her about your passion for real estate.  She'll come around. 

@Stephen Neto,

As with everything, the answer is "it depends".  As a landlord, I lean towards a yearly lease.  That gives me a sense that I will not have to look for another tenant for at least another year, and that the rents will keep coming in (hopefully).  However, I have a month-to-month agreement in place on one unit that I had planned to sell.  Having the M2M allowed me to pick a good time to sell, instead of forcing me to wait until the lease had expired.

Personally, if the tenant is not too much trouble for you, I would suggest going with the year lease.

Side note: You can evict regardless of the type of lease.  However, you must have good reason to evict.  I think you're referring to the termination of tenancy.

Good luck to you,

Ryan

@Edward Robles

I don't have any specific advice for you.  However, I would like to commend you.  I only wish I was thinking about these things at your age.   At 19, you're leagues ahead of where I was.  And, I would venture to guess that you are leagues beyond where other individuals your age are as well.  You keep on this path and you will be financially stable and likely wealthy.  Don't lose focus of your goals.

Ok, I lied... one piece of advice: Never stop educating yourself.

Ryan

I'm in Modesto and I work in Tracy. I've been in the market for a four-plex in either location for a long time. Unfortunately, anything that you find on the MLS just simply won't cash flow. And, the closer to the Bay Area, the worse the numbers become. Your best bet (and mine) would be to find wholesalers.

Good luck. :)

Ryan

@Thomas O. I don't have any debt other than the three houses.  One house (the one I'd be selling) has been rented for about 10 years now.  The other has been rented for about six years.

I'm sure, after I give him the Schedule E that he's requesting, that I'd qualify for the loan. My question isn't really geared towards the purchase of this house. It's really geared towards my goal of purchasing more rental properties in the next few years. I don't see how I can do so if I keep running into this DTI issue.

Ryan

@Dave Skow Good questions, and thank you for responding so quickly. :)

No, when he told me about the issue, he hadn't factored that info in.  He wants to do so, though and is currently waiting on documentation from me to move forward.

No, he didn't factor in the rental income from the new purchase.  I didn't think that would be allowable, since I cannot show a rental history yet.

But, I've read about others who have many more than three loans.  How do you suppose they are getting around the the debt-to-income requirement?

Ryan

First, here is the situation - I'm looking to purchase another investment property.  Though I haven't settled on one yet, the high-end is likely to be $300k.  To get there, I'd do 1031 exchange from an existing house that I have, which would net me about $150k.  Therefore, I'd need to finance the remaining $150k.  I've begun calling lenders to try to determine the best rates.  At one lender, he indicated that my debt-to-income ratio is too high, since I currently have three loans (primary residence and two investment properties, one of which I'd sell and 1031).

My income is fairly high, and due to a job change, it's recently increased $20k.  So, I was surprised to hear that my ratio was too high (52%), especially given the fact that I'd be exchanging one loan for another... and the new one would actually be a lower amount.  My question is this... How do investors get around this issue?  Am I looking at the wrong loans?

Ryan

I completely agree with @Ned J.  I too have been wondering what I'm missing that others are finding attractive.  Personally, unless something wonderful falls in my lap, I'm looking out of state for my next investment opportunity.

Ryan

@Andy Shah  In my opinion, appreciation has been VERY good these last few years.  I purchased about 3.5 years ago and I'm up 26.7% since then.  However, that's also the problem.  I can't see prices continuing on that trajectory.  Again, that's just my opinion.

Yes, it's easy to rent.  Demand far exceeds supply.  The amount of rent is extremely dependent on location.  Two properties separated by a major street could mean the difference of hundreds of dollars in rent.  If we're talking an average place in the NE area, you'd be assured at least $1,500/mo.  Average is around $1,600.  High end is likely $1,900.

Hope that helps,

Ryan